EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of the 28th day of January 1997, by and between
The Ryland Group, Inc., a Maryland corporation (the "Company"), and R. Chad
Dreier (the "Executive").
In consideration of the mutual covenants and agreements of the parties set
forth in this Agreement, and other good and valuable consideration the receipt
and sufficiency of which are acknowledged, the parties agree as follows:
1. Replacement of Prior Employment Agreement. This Employment Agreement
replaces and supercedes the Employment Agreement dated as of December
31, 1994 between the Company and the Executive which upon the effective
date of this Employment Agreement is terminated and no longer effective.
2. Term of Employment. The Company agrees to employ the Executive for a
period of four (4) years commencing as of January 1, 1997. This
Agreement shall be automatically renewed for a one (1) year period at
the end of the initial four (4) year term or at the end of each renewal
period until terminated in accordance with the terms of this Agreement.
Either party may terminate this Agreement at the end of the initial four
(4) year term or at the end of each one (1) year renewal period by
giving the other party written notice of termination delivered at least
one hundred eighty (180) days prior to the end of the initial term or
any renewal period.
If at any time during the initial term or any renewal period, a Change
of Control of the Company occurs (as defined in Section 7.2 below), the
term of this Agreement shall be the longer of (a) three (3) years
beyond the effective date of the Change of Control or (b) the term as
provided in this Section 2.
3. Position and Responsibilities. The Executive shall serve as the
Chairman of the Board of Directors, President and Chief Executive
Officer of the Company. In his capacity as Chairman of the Board,
President and Chief Executive Officer, the Executive shall be the
Company's highest ranking executive officer and shall have full
authority and responsibility for formulating and administering the plans
and policies of the Company subject to the control of the Board of
Directors.
4. Performance of Duties. The Executive shall devote his full time
attention and energies to the Company's business and will not engage in
consulting work or any business for his own account or for any person,
firm or corporation. The Executive may serve as a director of other
companies so long as this service does not interfere with the
performance of his duties with the Company.
5. Compensation. For all services to be rendered by the Executive during
the term of this Agreement, the Company shall pay and provide to the
Executive:
5.1 Base Salary. The Company shall pay the Executive a Base Salary in
an amount which shall be established from time to time by the
Board of Directors, provided the Base Salary shall not be less
than six hundred fifty-five thousand dollars ($655,000) per year.
This Base Salary is paid in installments consistent with the
normal payroll practices of the Company and reviewed annually to
determine whether, in the judgment of the Board of Directors, it
should be increased based on the performance of the Executive and
any other factors deemed appropriate.
5.2 Annual Bonus. The Executive is eligible to receive an annual cash
bonus (the "Bonus") in respect of each fiscal year during the term
of this Agreement equal to one percent (1.0%) of the Ordinary
Course Pre-Tax Income. "Ordinary Course Pre-Tax Income" is the
consolidated pre-tax income of the Company and its subsidiaries as
reflected in the audited consolidated financial statements of the
Company, as adjusted in good faith by the Compensation Committee
to eliminate the effect of nonrecurring gains and losses and other
items not reflective of the ongoing ordinary course of business
and operating performance of the Company. The Bonus shall be
payable to the Executive in cash within sixty (60) days after the
end of each fiscal year during the term of this Agreement.
5.3 Incentive Plans. The Executive shall participate in any stock
option and incentive award programs available to executive
officers of the Company. This participation is on a basis which
is commensurate with the Executive's position with the Company.
5.4 Other Benefits. The Executive is entitled to receive other
employee benefits, such as disability, group life, sickness,
accident and health insurance programs, split-dollar life
insurance programs and other perquisites that are available to
executive officers of the Company. This participation is on a
basis which is commensurate with the Executive's position with the
Company.
5.5 Stock Option
(a) Grant of Option
Pursuant to the terms and conditions of The Ryland Group,
Inc. 1992 Equity Incentive Plan (the "Plan), the Company
grants to the Executive during the period ending at the
close of business on January 28, 2007 (the "Option Period"),
the option to purchase (the "Option") from the Company at a
price of $12.75 per share up to 150,000 shares of the
Company's Common Stock. THE OPTION GRANTED SHALL NOT BE
TREATED AS AN "INCENTIVE STOCK OPTION" WITHIN THE MEANING OF
SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986. AS
AMENDED. The option is governed and controlled by all terms
of the Plan.
(b) Exercise of Option.
The Option may be exercised in whole or in part in
accordance with the following vesting schedule:
The aggregate number of shares of Common Stock optioned by
this Agreement shall be dividend into 3 installments.
The first installment for 50,000 shares may be exercised in
whole or in part beginning 1/29/98
The second installment for 50,000 shares may be exercised in
whole or in part beginning 1/29/99
The third installment for 50,000 shares may be exercised in
whole or in part beginning 1/29/00
In case an installment is not immediately exercisable, the
Board of Directors or the Compensation Committee of the Board
may in its discretion accelerate the time at which the
installment may be exercised. To the extent not exercised,
installments shall accumulate and be exercisable by the
Executive during the Option Period. Continued accrual and
vesting of installments shall cease immediately upon
termination of employment for any reason whatsoever, subject to
acceleration by the Board of Directors or the Compensation
Committee.
(c) Payment of Exercise Price.
The Executive shall pay the exercise price in the following
ways:
(I) cash payment (by certified check, bank draft or money
order payable to the order of the Company).
(ii) if approved by the Company, cash payment may be made from
the proceeds of an immediate sale of Common Stock
receivable upon the exercise of the Option; or
(iii) if approved by the Company, delivery of Common Stock
(including executed stock powers attached thereto);
The payment of the exercise price shall be delivered with a
notice of exercise, which notice will be in a form provided by
the Company.
The Company shall, subject to the receipt of withholding tax,
issue to the Executive the stock certificate for the number of
shares of Common Stock with respect to which the Option is
exercised.
The value of shares of Common Stock used as payment for the
exercise of an Option shall be the closing price of such shares
on the New York Stock Exchange on the date of exercise of an
Option or as otherwise determined by the Company, the Board of
Directors or the Compensation Committee of the Board of
Directors.
(d) Termination
The Option shall terminate upon the happening of the earliest
of the following events:
(i) January 28, 2007
(ii) The expiration of 90 days after the date of termination
of the Executive's employment, except in the case of
death, Disability (defined below) or retirement. During
this period, the Executive shall have the right to
exercise the Option to the extent it is exercisable on
the termination date.
(iii) The expiration of three (3) years after the date of death
of the Executive if death occurs during the term of this
Agreement. During this period, the Executive's estate,
personal representative or beneficiary shall have the
right to exercise the Option to the extent it is
exercisable on the date of death.
(iv) The expiration of three (3) years after the date the
Executive's employment is terminated due to Disability or
retirement. During this period, the Executive shall have
the right to exercise the Option to the extent it is
exercisable on the date of termination.
(e) Merger, Consolidation or Share Exchange.
After any merger, consolidation or share exchange in which the
Company is the surviving or resulting corporation, the
Executive shall be entitled, upon the exercise of an Option, to
receive the number and class of shares of stock or other
consideration to which the Executive would have been entitled,
if, immediately prior to such merger, consolidation or share
exchange, the Executive had exercised the Option in accordance
with and subject to the terms of this Agreement and the Plan.
If the Company is not the surviving or resulting corporation in
any merger, consolidation or share exchange, the surviving or
resulting corporation shall tender stock options to purchase
its shares on terms and conditions that substantially preserve
the rights and benefits under this Option.
5.6 Stock Units
(a) Grant of Stock Units.
Pursuant to the terms and conditions of the Plan, the
Company grants to the Executive an award of 45,000 Stock
Units (the "Stock Units") pursuant to Section 10 of the
Plan.
(b) Vesting of Stock Units.
The Stock Units become vested and payable in accordance with
the following vesting schedule:
DATE VESTING
November 1, 1999 15,000 Stock Units
November 1, 2000 30,000 Stock Units
If the Executive terminates employment with the Company for
any reason prior to any vesting date, all unvested Stock
Units are immediately forfeited and cancelled.
Notwithstanding the foregoing, all unvested Stock Units
shall vest and be paid by the Company to the Executive upon
the occurrence of a Change of Control (as defined in Section
7.2 below).
(c) Payment of Stock Units.
Upon each vesting date on which the Executive is employed by
the Company, the number of Stock Units which become vested
on such date shall be paid to the Executive in an equal
number of shares of Common Stock of the Company and, upon
payment, such Stock Units are automatically fully paid and
cancelled.
(d) Dividend Equivalents.
As of each dividend payment date with respect to Common
Stock, the Executive shall receive a cash dividend
equivalent payment equal to the product of (i) the pre-share
cash dividend payable with respect to each share of Common
Stock on that date and (ii) the total number of Stock Units
which have not been vested, paid or cancelled as of the
record date corresponding to such dividend payment date.
(e) Delivery of Stock Certificates.
The stock certificate for shares of Common Stock issued to
the Executive in payment of any vested Stock Unit shall be
delivered to the Executive on the applicable vesting date.
(f) Tax Matters.
The Executive will pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes
required by law to be withheld with respect to the payment
of any Stock Unit no later than the date of vesting of each
Stock Unit. Tax obligations may be paid in whole or in part
in shares of Common Stock, including shares retained from
the payment of the Stock Units, valued at their Fair Market
Value (as defined in the Plan) on the date of payment.
(g) Rights of Executive With Respect to Stock Units.
The Executive shall have no rights as a stockholder with
respect to any Stock Unit or any share of Common Stock to be
issued with respect to any Stock Unit until the date of
vesting and payment. The Executive's rights with respect to
Stock Units shall be the rights of a general unsecured
creditor of the Company until the Stock Units vest and
shares of Common Stock are actually issued to the Executive.
(h) Adjustments.
The number of Stock Units shall be appropriately adjusted,
as determined by the Board of Directors or Compensation
Committee of the Board of Directors pursuant to the Plan, in
the event of any stock split, combination or similar
transaction.
(i) Stock Units Subject to Terms and Conditions of the Plan.
The Stock Units and all shares of Common Stock issued with
respect to Stock Units shall be subject to the terms and
conditions of the Plan, which is incorporated herein by this
reference.
6. Employment Termination.
6.1 Termination Due to Retirement or Death. In the event the
Executive's employment is terminated by reason of retirement or
death, the Executive's benefits shall be determined in accordance
with the Company's retirement, survivor's benefits, insurance or
other applicable program then in effect. Upon the effective date
of termination, the Company's obligation to pay and provide the
compensation described in Section 5 shall expire, except to the
extent the benefits described in Section 5 continue after
retirement or death. In addition, the Company shall pay to the
Executive or the Executive's beneficiaries or estate a pro rata
share of the Bonus for the year in which the termination occurs
based on the results of the Company for that fiscal year. This
pro rata Bonus shall be determined by multiplying the Bonus for
the applicable fiscal year by a fraction, the numerator of which
is the number of days in such fiscal year prior to the date of
termination and the denominator of which is the total number of
days in such fiscal year. The pro rata Bonus shall be paid within
sixty (60) days of the end of the applicable fiscal year.
6.2 Termination Due to Disability. In the event the Executive becomes
Disabled (as defined below) and is unable to perform his duties
for more than one hundred twenty (120) days during any period of
twelve (12) months or, in the reasonable determination of the
Board of Directors, the Executive's Disability (as defined below)
will exist for more than one hundred twenty (120) days, the
Company has the right to terminate the Executive's employment and
the Company's obligation to pay and provide the compensation
described in Section 5 shall expire, except to the extent the
benefits described in Section 5 continue after Disability. In
addition, the Company shall pay to the Executive a pro rata share
of the Bonus for the year in which the termination occurs based on
the results of the Company for that fiscal year determined as
provided in Section 6.1. The pro rata Bonus shall be paid within
sixty (60) days of the end of the applicable fiscal year.
The term "Disabled" or "Disability" means the incapacity of the
Executive, due to injury, illness, disease or bodily or mental
infirmity, to engage in the performance of his duties with the
Company. A Disability is determined by the Board of Directors
upon receipt of and in reliance on competent medical advice from
one or more individuals selected by the Board who are qualified
to give professional medical advice.
6.3 Voluntary Termination by the Executive. The Executive may
terminate this Agreement at any time by giving the Board of
Directors written notice of intent to terminate delivered at least
ninety (90) days prior to the effective date of such termination.
Upon the expiration of this ninety (90) day period, the
termination by the Executive shall become effective. The Company
shall pay the Executive his Base Salary through the effective date
of termination plus all benefits to which the Executive has a
vested right at that time. The Executive shall not receive a
Bonus for the fiscal year in which voluntary termination occurs.
Upon the date of termination, the Company and the Executive shall
have no further obligations under this Agreement except as set
forth in Sections 8 and 9.
6.4 Termination by the Company Without Cause. The Board of Directors
may terminate the Executive's employment for reasons other than
death, Disability, retirement or for Cause (as defined in Section
6.5) by notifying the Executive in writing at least thirty (30)
days prior to the effective date of termination. Upon the
expiration of this thirty (30) day period, the termination by the
Company is effective. Within thirty (30) days after the date of
termination, the Company shall pay to the Executive a lump sum
cash payment equal to the greater of (a) the Base Salary in effect
for the remaining term of this Agreement, or (b) eighteen (18)
months of the Base Salary in effect as of the effective date of
termination, and shall provide to the Executive a continuation of
his health and welfare benefits for the greater of (a) such
remaining term of this Agreement or (b) eighteen (18) months. If
the Company is unable to provide health and welfare benefits as
required by this Section 6.4, the Company shall provide equivalent
benefits to the Executive or pay to the Executive a lump sum cash
payment equal to the value of the benefits which the Company is
unable to provide. The Company shall pay the Executive an annual
Bonus for the year in which termination occurs based upon the
performance of the Company through the end of the fiscal year in
which the termination occurs. This annual Bonus shall be paid
within sixty (60) days of the end of the applicable fiscal year.
The Company shall also pay the Executive all benefits to which the
Executive has a vested right at the time of termination. Upon the
date of termination, the Company and the Executive shall have no
further obligations under this Agreement except as set forth in
Sections 8 and 9.
6.5 Termination for Cause. The Board of Directors may terminate the
Executive's employment at any time for "Cause". "Cause" is
determined by the Board of Directors and is defined as fraud,
embezzlement, theft or other criminal act constituting a felony
under U.S. laws, or the failure of the Executive to perform any
material obligations under this Agreement for reasons other than
the Executive's death, Disability or retirement. In the event
this Agreement is terminated by the Board of Directors for Cause,
the Company shall pay the Executive his Base Salary through the
date of termination and the Executive shall forfeit all rights and
benefits he is entitled to receive including any right to a Bonus
for the fiscal year in which the termination occurs. The Company
and the Executive thereafter shall have no further obligations
under this Agreement except as set forth in Sections 8 and 9.
6.6 Termination for Good Reason. The Executive may terminate this
Agreement for Good Reason (as defined below) by giving the Board
of Directors thirty (30) days written notice of intent to
terminate, which notice sets forth the facts and circumstances for
the termination. Upon the expiration of this thirty (30) day
period, the termination by the Executive is effective and the
Company shall pay the Executive the benefits set forth in Section
6.4.
"Good Reason" means, without the Executive's written consent, the
occurrence of any of the following:
(a) The assignment of the Executive to duties materially
inconsistent with, or a reduction or alteration in the
nature or status of, the Executive's authorities, duties,
responsibilities or status as an executive officer of the
Company from those in effect during the preceding year;
(b) The Company requires the Executive to be based at a location
which is more than fifty (50) miles from the Executive's
then current primary residence;
(c) A reduction by the Company in the Executive's Base Salary;
or
(d) The failure of the Company to obtain an agreement from any
successor to the Company to perform this Agreement.
7. Change in Control.
7.1 Termination After Change of Control. In lieu of the compensation
and benefits provided in Sections 5 or 6, which will be superseded
and replaced by the provisions of this Section 7, the following
payments and benefits will be provided to the Executive by the
Company in the event of a Termination of Employment (as defined
below) within three (3) years after a Change of Control (as
defined below) of the Company:
(a) Lump Sum Cash Payment. On or before the Executive's last
day of employment with the Company, the Company will pay the
Executive an amount equal to the Executive's unpaid Base
Salary for the year in which the Termination of Employment
occurs and a pro rata Bonus through the date of Termination
of Employment determined in accordance with Section 6.1.
Also, on or before the Executive's last day of employment
with the Company, the Company will pay the Executive a lump
sum cash payment equal to three (3) times the highest Annual
Compensation (as defined below) paid to the Executive in any
of the three (3) calendar years immediately preceding the
date of Termination of Employment.
(b) Accelerated Vesting and Supplemental Payments. All rights,
awards and benefits of the Executive in the TRG Incentive
Plan or other incentive plan, the deferred compensation
plans (including the Retirement and Stock Ownership Plan,
Executive and Director Deferred Compensation Plan and any
successor or replacements plans) and any stock option or
other benefit plans of the Company in which the Executive
participates shall immediately vest in full and the
Executive shall be paid in a lump sum as soon as practicable
after the date of Termination of Employment. To the extent
that any of the plans of the Company would not under
applicable law permit accelerated vesting, the Executive
will be paid supplementally by the Company the amount of
additional benefits payable if full vesting had taken place
as of the date of Termination of Employment. All
supplemental payments are provided on an unfunded basis, are
not intended to meet the qualification requirements of
Section 401 of the Internal Revenue Code, and shall be
payable solely from the general assets of the Company.
(c) Insurance and Other Special Benefits. The Executive's
participation in the life, accident and health insurance,
employee welfare benefit plans (as defined in the Employee
Retirement Income Security Act of 1974) and other fringe
benefits (the "Benefits") provided to the Executive prior to
the Change of Control or the Termination of Employment shall
be continued or equivalent benefits provided by the Company
at no cost to the Executive for a period of two (2) years
from the date of the Executive's Termination of Employment.
If for any reason the Company is unable to continue the
Benefits as required by the preceding sentence, the Company
shall pay to the Executive a lump sum cash payment equal to
the value of the Benefits which the Company is unable to
provide.
(d) Relocation Assistance. Should the Executive move his
residence in order to pursue other business opportunities
within two (2) years after the date of the Executive's
Termination of Employment, he will be reimbursed for any
expenses incurred in that relocation, including taxes
payable on the reimbursement, which are not reimbursed by
another employer. Benefits under this paragraph will
include assistance in selling the Executive's home and all
other assistance and benefits which are provided by the
Company under its relocation plan as in effect immediately
prior to the Change of Control or the Termination of
Employment.
(e) Stock Rights. All stock options, stock appreciation rights,
stock purchase rights, restricted stock rights and any
similar rights which the Executive holds shall become fully
vested and be exercisable on the date of Termination of
Employment.
(f) Outplacement Assistant. The Executive shall be reimbursed
by the Company for the cost of all outplacement services
obtained by the Executive within the two (2) year period
after the date of Termination of Employment provided the
total reimbursement shall be limited to an amount equal to
fifteen percent (15%) of the Executive's Annual Compensation
for the calendar year immediately preceding the date of
Termination of Employment.
7.2 Definitions.
(a) A "Change of Control" shall take place on the date of the
earlier to occur of any of the following events:
(i) The acquisition by any person, other than the Company
or any employee benefit plan of the Company, of
beneficial ownership of 20% or more of the combined
voting power of the Company's then outstanding voting
securities;
(ii) The first purchase under a tender offer or exchange
offer, other than an offer by the Company or any
employee benefit plans of the Company, pursuant to
which shares of common stock have been purchased;
(iii) During any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors of the Company cease
for any reason to constitute at least a majority
thereof, unless the election or the nomination for the
election by stockholders of the Company of each new
director was approved by a vote of at least two-thirds
of the directors then still in office who were
directors at the beginning of the period; or
(iv) Approval by stockholders of the Company of a merger,
consolidation, liquidation or dissolution of the
Company, or the sale of all or substantially all of
the assets of the Company.
(b) "Annual Compensation" shall mean the sum of the Base Salary
and the Bonus paid to the Executive and all vested amounts
credited to the Executive under any incentive compensation
or other benefit plans of the Company in which the Executive
participates during the applicable calendar year.
(c) A "Termination of Employment" shall take place in the event
that (a) the Executive's employment is terminated for any
reason other than as a consequence of death, disability or
normal retirement, (b) the Executive is assigned any duties
or responsibilities that are inconsistent in any respect
with his position, duties, responsibilities or status prior
to the Change of Control, (c) the Company requires the
Executive to be based at a location which is more than fifty
(50) miles from the Executive's then current primary
residence, (d) the Executive's Base Salary is reduced, or
(e) the Executive experiences in any year a reduction in the
ratio of his incentive compensation, bonus or other such
payments to his base compensation which is greater than the
average reduction in the ratio of incentive compensation,
bonus or other such payments to base compensation
experienced by all of the Company's or the successor
company's executive officers.
7.3 Subsequent Imposition of Excise Tax. If it is ultimately
determined by a court or pursuant to a final determination by the
Internal Revenue Service that any portion of the payments to the
Executive is considered to be an "excess parachute payment,"
subject to the excise tax under Section 4999 of the Code, which
was not contemplated to be an "excess parachute payment" at the
time of payment, the Executive shall be entitled to receive a lump
sum cash payment sufficient to place the Executive in the same net
after-tax position, computed by using the "Special Tax Rate" as
such term is defined below, that the Executive would have been in
had such payment not been subject to such excise tax, and had the
Executive not incurred any interest charges or penalties with
respect to the imposition of such excise tax. For purposes of
this Agreement, the "Special Tax Rate" shall be the highest
effective Federal and state marginal tax rates applicable to the
Executive in the year in which the payment contemplated under this
Section 7.3 is made.
8. Noncompetition and Proprietary Information.
8.1 Prohibition on Competition. During the term of this Agreement and
for twenty-four (24) months following termination of this
Agreement pursuant to Sections 2, 6.1, 6.2, 6.3 or 6.5 (the
"Restrictive Period"), the Executive shall not, as a stockholder,
partner, employee or officer, engage, directly or indirectly, in
any business or enterprise which is "in competition" with the
Company. For purposes of this Agreement, a business or enterprise
will be "in competition" if it is engaged in any significant
business activity of the Company or its subsidiaries within the
United States.
The Executive shall be allowed to purchase and hold for investment
less than two percent (2%) of the shares of any corporation whose
shares are regularly traded on a national securities exchange or
in the over-the-counter market.
8.2 Disclosure of Information. The Executive recognizes that he has
access to and knowledge of certain confidential and proprietary
information of the Company which is essential to the performance
of his duties under this Agreement. The Executive will not,
during or after the term of his employment by the Company, in
whole or in part, disclose such information to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever, nor shall he make use of any such information for his
own purposes.
8.3 Covenants Regarding Other Employees. During the term of this
Agreement and the Restrictive Period, the Executive agrees not to
attempt to induce any employee of the Company to terminate his or
her employment with the Company, accept employment with any
competitor of the Company, or interfere in a similar manner with
the business of the Company.
8.4 Specific Performance. The parties recognize that the Company will
have no adequate remedy at law for breach of the requirements of
this Section 8 and, in the event of such breach, the Company and
the Executive agree that, in addition to the right to seek
monetary damages, the Company will be entitled to a decree of
specific performance, mandamus, or other appropriate remedy to
enforce performance of these requirements.
9. Indemnification. The Company covenants and agrees to indemnify and hold
harmless the Executive fully, completely and absolutely against any and
all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including reasonable attorney's fees), losses and damages
resulting from the Executive's good faith performance of his duties
under this Agreement subject to the requirements and limitations imposed
by the Company's Articles of Incorporation and By-Laws and applicable
law.
10. Assignment.
10.1 Assignment by Company. This Agreement may be assigned or
transferred to, and shall be binding upon and inure to the benefit
of, any successor of the Company, and any successor shall be
deemed substituted for all purposes of the "Company" under the
terms of this Agreement. As used in this Agreement, the term
"successor" shall mean any person, firm, corporation or business
entity which at any time, whether by merger, purchase or otherwise
acquires all or substantially all of the assets or the business of
the Company. Notwithstanding such assignment, the Company shall
remain jointly and severally liable for all obligations hereunder.
10.2 Assignment by Executive. The services to be provided by the
Executive to the Company are personal to the Executive and the
Executive's duties may not be assigned by the Executive. This
Agreement shall, however, inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive dies while any amounts
payable to the Executive remain outstanding, all such amounts
shall be paid to the Executive's designee, estate or
beneficiaries.
11. Dispute Resolution. Either the Executive or the Company may elect to
have any good faith dispute or controversy arising under or in
connection with this Agreement settled by arbitration by providing
written notice of such election to the other party specifying the nature
of the dispute to be arbitrated. If arbitration is selected, such
proceeding shall be conducted before a panel of three (3) arbitrators
sitting in a location agreed to by the Company and the Executive within
fifty (50) miles from the location of the Executive's principal place of
employment in accordance with the rules of the American Arbitration
Association. Judgment may be entered on the award of the arbitrators in
any court having competent jurisdiction. To the extent that the
Executive prevails in any litigation or arbitration seeking to enforce
the provisions of this Agreement, the Executive shall be entitled to
reimbursement by the Company of all expenses of such litigation or
arbitration, including reasonable legal fees and expenses and necessary
costs and disbursements.
12. Miscellaneous.
12.1 Entire Agreement. This Agreement supersedes any prior agreements
or understandings, oral or written, between the Executive and the
Company with respect to the subject matter hereof, and constitutes
the entire agreement of the parties with respect thereto.
12.2 Modification. This Agreement shall not be varied, altered,
modified, cancelled, changed or in any way amended except by
mutual agreement of the parties in a written instrument executed
by the parties or their legal representatives.
12.3 Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for
any reason, the remaining provisions of this Agreement shall be
unaffected and shall remain in full force and effect.
12.4 Tax Withholding. The Company may withhold all Federal, state,
city or other taxes required pursuant to any law or governmental
regulation or ruling.
12.5 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent beneficiaries of any
amounts to be received under this Agreement. Such designation
must be in a signed writing acceptable to the Board of Directors,
the Company or designees of the Board or Company. The Executive
may change such designation at any time.
12.6 Board Committee. Any action taken or determination made by the
Board of Directors under this Agreement may be taken or made by
the Compensation Committee or any other Committee of the Board of
Directors.
12.7 Governing Law. To the extent not preempted by Federal law, the
provisions of this Agreement shall be construed and enforced in
accordance with the laws of the State of Maryland.
12.8 Notice. Any notices, requests, demands or other communications
required by or provided for in this Agreement shall be sufficient
if in writing and sent by registered or certified mail to the
Executive at the last address he has filed in writing with the
Company or, in the case of the Company, at its principal office.
IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement
as of the date first above written.
THE RYLAND GROUP, INC. EXECUTIVE:
By: /s/ Edward W. Gold /s/ R. Chad Dreier
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Edward W. Gold, Senior Vice President R. Chad Dreier
Attest:
/s/ Timothy J. Geckle
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Timothy J. Geckle, Secretary